I run an import-export trading company — how do customs duty and VAT actually apply to my goods?

When goods enter the UAE from abroad, they carry a customs duty — typically 5% of the customs value under the GCC common external tariff, though certain goods carry different rates — collected at the port of entry, entirely separate from VAT on the import. If your company is VAT-registered, import VAT is normally accounted for through the reverse charge mechanism: you record it as both output tax and input tax on the same return at the same time, without an actual cash payment at the port, provided your tax registration number is correctly linked to the customs import declaration.

A common mistake is failing to record import VAT on the return simply because there's no conventional tax invoice from the overseas supplier — which either forfeits the recovery or, worse, creates a mismatch between customs records and the VAT return that the authority can later flag. Inventory valuation deserves equal attention: trading stock should be valued at actual landed cost — purchase price plus freight, insurance, and customs duty — not expected resale price, and whichever valuation method you use (weighted average or FIFO) needs to be applied consistently across periods so margins are comparable period to period.

Companies that also export, or that move goods through free zones or designated customs areas, need careful tracking of the goods' actual movement to correctly determine whether a transaction qualifies for the 0% export rate or is a domestic supply at the standard rate. RASEEKH helps trading companies align the import-export cycle — from customs declarations through to the VAT return — so the numbers match the paperwork.